Substantial performance improvements and cost reductions in integrated circuits for the microcomputer and telecommunications fields have been made in recent years. These improvements in cost/performance have made it economically attractive to mass produce certain system applications of this technology at affordable prices. One such area of application is the point of sale terminal for credit verification of a credit cardholder wishing to make a purchase.
Until recently, retail establishments, such as stores and restaurants, could not afford to take the time and effort to verify credit for purchases of goods or services having a small dollar value. Credit verification involved making a phone call to a credit verification office, waiting for some lesser or greater time period to be connected to a person at the office, and then verbally giving the credit card number and awaiting the authorization code for the transaction. Consequently, only credit card purchases which totalled more than a certain amount were subject to credit verification and these transactions often tied up sales or checkout clerks for substantial periods of time and made customers unhappy about the wait.
The problems of credit verification resulted in losses to the retail merchants from unauthorized credit card usage and less than enthusiastic reception of credit card usage for large purchases in busy stores. Within the past few years, point of sale terminals tied on a telecommunications basis to a central computer for credit verification have begun to make a large impact on retail merchants. Initially these terminals were very large, quite expensive, and thus not very affordable to the average merchant. Some of the terminals required many of the same steps to be performed that manual credit verification required, i.e. the manual placing of a phone call to the computer and manual entry of the credit card number and the other transaction data.
Gradually the performance of the prior art terminals increased as more microcomputer power and telecommunications capability with autodialing were introduced into the terminals and as card stripe reader capability was provided. All of these improvements made use of the terminal more automatic and completing the credit verification task more time efficient. Still the size of the prior art terminals was large, making it difficult to find room on crowded checkout and cash register counters for another piece of equipment. Also the units were still quite expensive, limiting the size of retail establishment which could cost justify the terminal and the on-line telecommunications costs associated with it. Clearly, the limitations of prior art terminals impedes more wide spread acceptance of the point of sale, on line credit verification terminals and improvements are needed to make this technology cost effective for, and attractive to, the large population of small retail establishments.